Question
Use the table for the question(s) below. Consider the following list of projects: Project Investment NPV A 135,000 6,000 B 200,000 30,000 C 125,000 20,000
Use the table for the question(s) below.
Consider the following list of projects:
Project | Investment | NPV |
A | 135,000 | 6,000 |
B | 200,000 | 30,000 |
C | 125,000 | 20,000 |
D | 150,000 | 2,000 |
E | 175,000 | 10,000 |
F | 75,000 | 10,000 |
G | 80,000 | 9,000 |
H | 200,000 | 20,000 |
I | 50,000 | 4,000 |
a) Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions?
b) Assuming that your capital is constrained, which project should you invest in first? Why? Show all Calculations to receive full credit.
c) Assuming that your capital is constrained, what is the fifth project that you should invest in? Show all Calculations to receive full credit.
d) Assuming that your capital is constrained, so that you only have $600,000 available to invest in projects, which projects should you invest in and in what order? Explain and show all Calculations to receive full credit.
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